Marketing Doctor John Tantillo’s Winner and Loser of The Week News Corporation and McDonald’s

 

Brand Winner…

And Loser…


 
 

Marketing Doctor John Tantillo’s Winner and Loser of The Week

Winner:  News Corporation

 

Loser:  McDonald’s

                                              

WINNER:

News Corporation is our winner.  Yes, News Corp.  The embattled media powerhouse that Rupert Murdoch built into a stable of print and broadcast brands that span the globe is winning –no matter what so many commentators are saying.

Here’s the bottom line:

We have to understand that Fleet Street simply isn’t Main Street.  A British story isn’t an American story.

The current scandal concerning phone tapping and other invasions of privacy by the now defunct News of the World is a very British scandal.  In many ways, this is something that could only have happened on Fleet Street and only at a tabloid on Fleet Street.  This means that while journalists love this story (because many of them love to hate Murdoch), it won’t necessarily spread like wild fire either to the general public in America (who, frankly, don’t see its relevance to them) or beyond.  And it probably won’t lead to more discoveries of this kind of behavior at other News Corp. newspaper brands.  After all, the questionable standards and practices of British tabloids where there is long history of paying for stories, et cetera are well known and frowned on almost everywhere else.

But the real reason News Corp. is this week’s winner is because News Corp. is a company made up of vigorous brands that care about their individuals Target Markets and are run by a company that honors this focus.  The pie attack in which Murdoch’s wife quickly defended him might have garnered some public relations-style sympathy, but News Corp’s (and Murdoch’s) success is built on years of solid brand management and that is what will see this company and its brands through.

Consider this.  When Murdoch made the decision to shutter News of the World, 200 employees lost their jobs.  Now anyone losing their job is an unfortunate thing, but you have to measure these 200 jobs against the size of News Corp.’s vast empire. 

So, how many people does News Corp. still employ?  51,000.  That means less half of one percent of the company’s entire workforce was affected here.

That alone should tell us that while what happened at News of the World is important, it does not necessarily say anything about the rest of News Corp.

Fact is, Rupert Murdoch and News Corp. has consistently preserved brand equity.  When News Corp finally won control of The Wall Street Journal, the general assumption was that the Journal would soon change for the worst.  That has simply not happened.  News Corp. has never been in the business of taking brands that work and ruining them. 

The weeks and months to come will probably show –no matter what happens to Murdoch personally—that the many media ventures the company has controlled around the world will continue to thrive.  Will this scandal attach to the book publisher Harper Collins or to the movie business of Twentieth Century Fox?  Fuggedaboutit.

People buy brands not companies.  And News Corp., like General Motors, is a company that masterfully delivers brands to its many consumers and keeps its corporate identity at a distance.  No one thinks News Corp. when they watch Avatar.  No one thinks News Corp. when they read a book by Tolkien.   But News Corporation is behind both.

If the key is individual brand management for such a company then in a scandal the response must be to show that one brand does not a company make or break.  And that is what Rupert Murdoch did with speed and decisiveness when he shuttered News of the World and appeared at the parliamentary hearings.

Murdoch followed the crisis management rule to a tee:

 1.  Respond quickly (even if it means taking painful action);

2.    Be contrite;

3.  Take responsibility;

4.   Be Honest (here, it meant that Murdoch admitted what he didn’t know and still might discover regarding wrongdoing at News of the World);

5.    Communicate a plan of action.

Murdoch did all of the above and the effect –like closing a fire door— should prevent the crisis from spreading to the wider brand portfolio.  But even if it doesn’t, the basic structure of News Corp. and its ongoing emphasis on individual brands certainly will. 

One final note, a personal disclaimer.  I have written for Fox News and appeared on numerous Fox shows over the past few years.  Of course, Fox is one of those News Corp. brands, but other than knowing that I was walking into the News Corporation building to visit Fox, I never really thought I was writing or appearing for News Corp. –it was and is always Fox.


LOSER:

McDonald’s is this week’s loser because not every adaptation to pressure is good for a brand.

I’m talking about McDonald’s decision to cut its Happy Meal fry serving in half by the end of the year and add apple slices. 

Don’t get me wrong, I am a believer in healthy eating choices and portion control, but McDonald’s emerges as a loser from the decision because this supreme marketer seems to have violated the golden rule of marketing: satisfy yours customers’ needs.

Are customers really clamoring for the fries to be cut in half and apple slices substituted?  Or is this more an example of a range of non-profit activist groups and Nanny-state government “coaxing” McDonald’s to make this change?

While an argument can certainly be made that McDonald’s is smartly using the change as a platform from which to attract a new Target Market (i.e., those parents who have shunned McDonald’s because they didn’t think the company was serious about good nutritional choices), it’s more likely that the company is simply trying to make a short-term bargain with groups that –let’s face it—won’t be content until the McDonald’s that we know is no more.

McDonald’s already must post the nutritional data about its food for all consumers to see.  The restaurant also offers a lot of choice by allowing patrons to swap out less healthy foods for more healthy ones. 

Choices for consumers usually translates to universally good marketing, but what McDonald’s is doing actually limits choices.  

Let’s imagine a scenario like this.  A mom with two kids who cares about healthy food, but on a road trip enjoys taking the kids to McDonald’s for a treat.  But  let’s say this parent is on a budget and likes to split those fries in that Happy Meal between his two kids.  Oh, and she brings her own apples.  It might seem like a small thing, just a minor detail, but now she has to buy more fries.  This is a hassle and a loss of choice.   Minor details matter in marketing and they add up in surprising ways.  People get used to the range of options they have as consumers.  They don’t like having those choices taken away and being told what they have to buy.

Folks, sure, McDonald’s might also be expanding their Target Market, but fact is there are other ways they can do this than by limiting choice or buckling to consumer watchdog pressure.  McDonald’s should take a stand for its customers.  People like McDonald’s food and in moderation there is nothing wrong with it.  McDonald’s should campaign for consumer freedom and make good nutrition part of this campaign –not something that makes kids and adults alike think that they have to eat their vegetables or else.

As the great Bill Cosby said, “I don’t know the key to success, but the key to failure is trying to please everybody.”   McDonald’s will never please the health extremists and, frankly, they shouldn’t try.

And, remember, it’s always easier when you keep marketing and branding in mind. 

 

 

TODAY’S TANTILLO TAKEAWAY –  Every detail matters in the building (or ruining) of a brand.

 

 


 

 

 

 

 

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